The forestry department in the Ministry of Agriculture and Rural Development has implemented a number of measures in recent years to encourage investors to trust their money to the sustainable and environmentally sound private investment that is developing in the nation's abundant and lucrative forests.
The head of planning for the forestry department, Nguyen Nghia Bien, said that they have undertaken a number of initiatives to draw attention to forestry investment, including offering tax exemptions to businesses that invest in reforestation and wood processing projects in targeted areas.
"In addition, investors have received low-interest loans, support for transportation and personal income tax exemptions,"
Despite their efforts, however, the country is still struggling to gain ground in the forestry investment industry from foreign parties. Recent figures pointed out that crucial foreign investors only accounted for 1.2 per cent of the total forestry industry.
Duong Van Coi, from the Forest Research and Planning Institute, said that while there had been investment in certain areas concerning the forestry industry – chiefly in wood processing – little international attention had been paid to sustainable forestry and afforestation.
"The investment trend could result in unsustainable development as most of the wood processed in the country is imported or illegally exploited from prohibited forests," Mr Coi. "Policies encouraging private sector to invest in forestry would create materials for wood processing and more stable development."
Private and foreign investment in the forestry sector has increased, with the former recently surpassing State investment, he noted. Last year, total investment in the sector reached VND704 trillion (US$33.5 billion), with VND278 trillion ($13.2 billion) coming from the domestic private sector, VND245 trillion ($11.6 billion) from State sources, and VND181 trillion ($8.6 billion) from foreign investment.
AAA analysis partner, Anthony Johnson, said that foreign investors were missing a trick by not putting their money into alternative assets such as sustainable forestry. Mr Johnson suggested that fund managers consider recommending impact investing as a great option for those interested in something different. Impact investing involves making investments in projects based in emerging markets and developing countries. This investment helps to provide much needed funding to local businesses, who can then use this cash injection to expand and grow – generating returns for the investors.
“The beauty of alternatives,”
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